CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Guarantor’s Liability on Partially Secured Debts – The Impacts of Pay Down Provisions in Serpanok Construction Inc. v. Point Ruston, LLC et al.

October 24, 2021 — Margarita Kutsin - Ahlers Cressman & Sleight
In Serpanok Construction, Inc. v. Point Ruston, LLC, Division Two of the Washington Court of Appeals decided an issue of first impression in Washington—whether a guarantor of a partially secured debt remains liable until the last dollar of the entire debt is paid off. After examining cases from other jurisdictions, the court held that that a guarantor is liable until the underlying debt is paid in full unless the agreement contains an express pay down provision. A pay down provision sets forth the guarantor’s right to reduce its obligation to the extent of any payment toward the debt, and it establishes that the guaranty applies only until an amount equivalent to the guaranteed amount is paid off. The Serpanok decision addressed several other issues, but the published portion of this part-published case focused on whether an entity involved in a real estate development, Point Ruston LLC, was discharged from its guaranty obligation following a foreclosure sale where the proceeds did not cover the entire debt owed to a subcontractor. Point Ruston LLC, Point Ruston Phase II LLC (“Phase II”), and Century Condominiums (“Century”) were affiliated entities (collectively “Point Ruston parties”) that constructed retail and residential structures on a site in Point Ruston. Serpanok Construction Inc. (“Serpanok”) entered into subcontract agreements with Phase II and Century to perform concrete and steel work on a parking garage and movie theater for the project. Point Ruston LLC was not a party to either subcontract. Read the court decision
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Reprinted courtesy of Margarita Kutsin, Ahlers Cressman & Sleight
Ms. Kutsin may be contacted at margarita.kutsin@acslawyers.com

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Construction Mediation Tips for Practitioners and 'Eyes Only' Tips for Construction Mediators

December 05, 2022 — Stacy L. La Scala - Construction Executive
Construction mediation can occur during or after construction and prior to or during arbitration or litigation. But, regardless of when a construction mediation occurs, its success often depends on the parties’ willingness to exchange critical information well in advance of the mediation session. Tips for the Construction Practitioner

1. Schedule a mandatory pre-session call.
A pre-session call with the mediator is the first and most effective opportunity to convey your client’s position and to allow the mediator to absorb and evaluate that information without distraction. On that call, counsel should describe the dispute and identify the decision-makers. Additionally, counsel should address the following questions:
1. Are the parties working together and sharing information, or are they at war?
2. Have the parties shared expert information?
3. Have demands been published?
4. Will the parties be publishing their briefs?
5. What confidential information is not in the mediation brief?
6. Will the decision-makers be participating? Are there any decision-makers who are not available or “behind the scenes”?

Reprinted courtesy of Stacy L. La Scala, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Wood Wizardry in Oregon: Innovation Raises the Roof for PDX Terminal

April 15, 2024 — Aileen Cho - Engineering News-Record
Drones, self-propelled modular transporters and a curtain wall that really does hang off the roof like a curtain are all notable technologies that made installing an 18-million-lb timber roof possible at Portland International Airport. Of equal weight is the emphasis on full-scale sourcing of the timber and representing the Pacific Northwest’s residents, history and geography. Reprinted courtesy of Aileen Cho, Engineering News-Record Ms. Cho may be contacted at choa@enr.com Read the full story... Read the court decision
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Real Estate & Construction News Roundup (10/11/23) – Millennials Struggle Finding Homes, Additional CHIPS Act Funding Available, and the Supreme Court Takes up Hotel Lawsuit Case

November 16, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, EV charging stations become more prevalent at commercial locations, home ownership becomes more difficult for younger Americans, Macy’s announces plans to build additional stores within strip malls, and more!

• Due to several factors including overpriced housing and student debt, millennials will not have the same level of home ownership as previous generations. (Jordan Rosenfeld, Yahoo)
• With the U.S. being short about 3.8 million housing units according Freddie Mac, 3-D printing may prove to be the answer while also being cost effective and environmentally friendly. (Lesley Stahl, Aliza Chasan, Shari Finkelstein and Collette Richards, CBS)
• The Department Commerce of announced a new initiative to funnel $500 million in CHIPS Act funding to projects with capital investments below $300 million that support the construction, expansion or modernization of semiconductor-related facilities in the U.S. (Sebastian Obando, Construction Dive)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team, Pillsbury

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Real Estate & Construction News Round-Up (05/18/22)

June 13, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
Businesses renovate office spaces at a historic pace, China plans to build a 3D-printed hydropower dam without human workers, the U.S. infrastructure package has thousands of projects underway, and more.

• Miami’s crypto-real estate boom has been challenging all conventional wisdoms as the price of crypto currencies like Bitcoin have surged, which could spill over into other popular real estate markets. (Peter Lane Taylor, Forbes)
• China is planning to build the world’s first 3D-printed hydropower dam in Tibet, with an AI-powered design and no human workers. (Matthew Loh, Business Insider)
• With the hybrid work model here to stay, businesses are having their offices renovated at a historic pace. (Joe Dyton, Connected Real Estate Magazine)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Construction Defect Lawsuit May Affect Home Financing

February 14, 2013 — CDJ STAFF
Homeowners in the Burlingame Ranch I Condominium Association already say they have problems with the siding on their units. The Aspen Business Journal says that their next problem might be with lenders. According to the homeowners’ attorney, Chris Brody, the association attempted to work things out, but this was not successful. Mr. Brody was unaware of any issues with sales or refinancing, but the article notes that “at least one homeowner was told he could not refinance with a Fannie Mae backed loan if there’s pending litigation.” Last year, Fannie Mae did adopt a guideline that made homes involved in construction defect lawsuits ineligible for home loans. Read the court decision
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Think Twice Before Hedging A Position Or Defense On A Speculative Event Or Occurrence

July 13, 2020 — David Adelstein - Florida Construction Legal Updates
Sometimes, hedging a position on a potential occurrence is not prudent. Stated differently, hedging a position on a contingent event is not the right course of action. The reason being is that a potential occurrence or contingent event is SPECULATIVE. The occurrence or event may not take place and, even if it does take place, the impact is unknown. An example of hedging a defense on such a potential occurrence or contingent event can be found in a construction dispute involving a federal project out of the Eastern District of Virginia, U.S. f/u/b/o Champco, Inc. v. Arch Insurance Co., 2020 WL 1644565 (E.D.Va. 2020). In this case, the prime contractor hired a subcontractor to perform electrical work, under one subcontract, and install a security system, under a separate subcontract. The subcontractor claimed it was owed money under the two subcontracts and instituted a lawsuit against the prime contractor’s Miller Act payment bond. The prime contractor had issued the subcontractor an approximate $71,000 back-charge for delays. While the subcontractor did not accept the back-charge, it moved for summary judgment claiming that the liability for the back-charge can be resolved at trial as there is still over $300,000 in contract balance that should be paid to it. The prime contractor countered that the delays caused by the subcontractor could be greater than $71,000 based on a negative evaluation in the Contractor Performance Assessment Reporting System (“CPARS”). A negative CPARS rating by the federal government due to the delays caused by the subcontractor would result in a (potential) loss of business with the federal government (i.e., lost profit) to the prime contractor. The main problem for the prime contractor: a negative CPARs rating was entirely speculative as there had not been a negative CPARs rating and, even if there was, the impact a negative rating would have on the prime contractor’s future business with the federal government was unknown. To this point, the district court stated:

In this case, [prime contractor’s] claim for damages is wholly speculative. [Prime contractor] has not produced any evidence that its stated condition precedent—a negative CPARS rating—will actually occur and will have a negative impact on its future federal contracting endeavors. Specifically, [prime contractor] has not identified any facts that indicate that it will be subject to a negative CPARS rating or any indication of the Navy’s dissatisfaction with its work as the prime contractor on the Project… Further, a CPARS rating is only one aspect taken into consideration when federal contracts are awarded. In sum, there is no evidence of the following: (1) a negative CPARS rating issued to [prime contractor]; (2) [prime contractor’s] hypothetical negative rating will be the result of the delay [prime contractor] alleges was caused by [subcontractor]; or (3) [prime contractor’s] hypothetical negative CPARS rating will result in future lost profits.

U.S. f/u/b/o Champco, Inc., supra, at *2 (internal citation omitted).

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Mississippi Sues Over Public Health Lab Defects

October 29, 2014 — Beverley BevenFlorez-CDJ STAFF
The state of Mississippi “is suing architects and designers of a new Public Health Lab, saying the $28 million lab wasn't up to containing deadly diseases, biohazards and chemicals,” reported The Clarion-Ledger. Dale Partners Architects, Earl Walls Associates, Eldridge and Associates, and Environmental Management Plus have been named as defendants. "The estimated damages are $3 million," attorney Dorsey Carson told The Clarion-Ledger. "This building is where they test tuberculosis, or where they would test anthrax or any other (biohazards). You don't have a choice – it has to meet rigorous standards." Charlie Alexander, a partner with Dale Partners, stated that “any allegations of design defects by his company and its team ‘are unfounded,’” reported The Clarion-Ledger. Read the court decision
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